Monday, August 07, 2017

How Much Is The Rich's "Fair Share" of Taxes

Liberals want to "tax the rich", but at some point you're just killing the goose that lays the golden egg. Even the New York Times sees this, although they sugarcoat it a bit in this story:

Our
top-heavy economy has come to this: One man can move out of New Jersey
and put the entire state budget at risk. Other states are facing similar
situations as a greater share of income — and tax revenue — becomes
concentrated in the hands of a few.

Last
month, during a routine review of New Jersey’s finances, one could
sense the alarm. The state’s wealthiest resident had reportedly “shifted
his personal and business domicile to another state,” Frank W. Haines
III, New Jersey’s legislative budget and finance officer, told a State
Senate committee. If the news were true, New Jersey would lose so much
in tax revenue that “we may be facing an unusual degree of income tax
forecast risk,” Mr. Haines said.

It isn't just New Jersey:

In
New York, California, Connecticut, Maryland and New Jersey, the top 1
percent pay a third or more of total income taxes. Now a handful of
billionaires or even a single individual like Mr. Tepper can have a
noticeable impact on state revenues and budgets.

California
had to account for a “Facebook effect” in 2012 and 2013 after that
company’s 2012 initial public offering of stock. The offering generated
more than $1 billion in revenue — much of that from the chief executive,
Mark Zuckerberg, and a small group of company shareholders. Washington,
D.C., had an unexpected $50 million gain in its 2012 fiscal year —
which helped create a budget surplus — after the death of a local
billionaire increased its estate tax receipts.

Some
academic research shows that high taxes are chasing the rich to
lower-tax states, and anecdotes of tax-fleeing billionaires abound. But
other studies say there is little evidence showing that the rich move
solely for tax purposes. Millionaires and billionaires who move from the
high-tax states in the Northeast to Florida, for instance, may be drawn
by the sunshine, lifestyle and retirement culture, in addition to lower
taxes.

The NYT is a liberal paper, so you knew "income inequality" had to come up somehow:

“In a time of rising inequality, I’m not sure the right answer is
lowering taxes or making them less progressive,” said Kim S. Rueben,
senior fellow of the Urban-Brookings Tax Policy Center at the Urban
Institute. “It’s more about keeping an eye on people, seeing where they
are and enforcing the tax rules.”

Don't let those rich people move! And if they do, tax them to death!

Seems to me that the states listed above can't afford to kill their golden goose. I'd suggest that if their budgets are overly dependent on just a few people, they probably shouldn't chase those people away with confiscatory tax rates.

In
California, 5,745 taxpayers earning $5 million or more generated more
than $10 billion of income taxes in 2013, or about 19 percent of the
state’s total, according to state officials.

“Any state that depends on income taxes is going to get sick whenever one of these guys gets a cold,” Mr. Sullivan said.

Liberals decry the rich--even though so many of them are rich themselves!--but can't fund a government without them. Hey libs, you want to be the party of science? Study some economics.